Explainer: The building process and government grants

There’s no better time to build a home in Australia with historically low interest rates and a range of federal and state government incentives available, making building a home a lot more affordable.

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The process can take months, so you will need to act fast to secure your house and land before 31 December 2020.

Step 1: Finance eligibility

Speak to a mortgage broker about your borrowing capacity and eligibility for the $25,000 HomeBuilder grant and any additional State Government building bonuses and First Home Owner Grants on offer. It is best to be in a good financial position and have a deposit ready to secure finance.

A qualified broker can write you a letter of eligibility that provides the land developer and builder with confidence of your financial position, or you may choose to seek pre-approval from a bank. The Letter of Eligibility can be prepared within 24-48 hours, however, pre-approval can take two to three weeks.

Step 2: Lock in the land

Find your perfect location and sign your land contract, this can be done on the spot! We recommend you request a copy of the contract documentation to read prior to your land signing appointment.

Step 3: Choose your home

Connect with your favourite builder and choose the perfect home for you. If you want to take advantage and qualify for the grants make sure the value of the house and land together doesn’t exceed $750,000 in value.

You will sign a Preliminary Works Contract (PWC) with your builder to allow them to commence working on your home design. The PWC can be done almost instantly- the same as a land contract.

Step 4: Sign the building contract

Once you have signed your PWC, your builder will commence your working drawings and prepare your building contract. Before you sign the building contract your land needs to have a site survey done and an engineers site report completed.

Working drawings for your new home can be drafted and then lastly you can sign the building contract.

It is important to know that to be eligible for HomeBuilder you must sign the building contract before 31 December 2020. Make sure you have gone through steps one to four before 30 October 2020. It can take up to 12 weeks (usually 6-10 weeks).

Step 5: Finance approval

Once you have your signed building contract and your prestart variations are finalised, both your building and land contracts are lodged with your bank or broker to arrange unconditional finance approval for your home loan This generally takes 2-6 weeks to be processed.

Step 6: Settle on your land

Once you have received your unconditional finance approval, you will then be able to settle on the land. Land settlement will usually occur four weeks from final formal finance approval date. 

Step 7: Slab down preparation

Once you have signed your building contract, received unconditional finance approval and settled on the land, your builder will apply for a Building Permit from the Local Council. They may also need to seek design approval from the land developer or apply for additional approvals from your local council to accommodate your proposed design.

Once this is all complete the slab can be poured and construction of your new home can begin!

To be eligible for the HomeBuilder grant construction must start within three months of signing the Building Contract.

GRANTS AVAILABLE

Exciting news for Australian homebuyers. The Federal Government has announced its HomeBuilder package, a $25,000 tax-free grant available to eligible owner-occupiers who build a new home or undertake a substantial renovation from 4 June until 31 December 2020.

There are additional grants available in many Australian states including:

WA:

The McGowan Government announced a $20,000 Building Bonus for new home builds until the end of the year. This grant will be available on top of the Federal Government’s $25,000 HomeBuilder Grant, as well as WA’s $10,000 First Home Owner Grant. If you qualify for all of these grants, you could access $55,000 in government assistance.

VIC:

For first home buyers in metro Melbourne, the HomeBuilder grant can be combined with the Victorian Government’s First Home Owner Grant of $10,000 for new builds, a total of up to $35,000 towards a first purchase.

QLD:

The Queensland Government has announced a further $5,000 building grant for people building in regional areas. This, along with the Federal building grant and Queensland’s first homebuyer grant of $15,000 means there is up to $45,000 in grants to assist homebuyers.

Satterley Property Group

Satterley is Australia largest private residential land developer that is always striving to build the most desirable residential communities in Australia based on market leading principles of design, environmental sustainability and community development. Satterley is a company built on trust and is this year celebrating 40 years in business.